Question
What is the difference between an investment grade bond and high yield or junk bond? What grades of bonds are considered investment grade for each
What is the difference between an investment grade bond and high yield or junk bond? What grades of bonds are considered investment grade for each rating agency? What grades of bonds are considered high-yield or junk bonds for each rating agency? In your response be sure to discuss default risk and the relationship between default risk and investment grade? What makes a junk bond a junk bond? Would you expect to earn a higher or lower return on a junk bond compared to an investment grade bond, and why? Explain which of the bond components (par value, price, coupon rate, or maturity) indicated the level of default risk associated with the bond. What investment grade did Dominos receive for this bond offering? How is this grade better for Dominos than if it had received a junk rating? How does Dominos backing of its bonds with revenue streams decrease the riskiness of the bonds?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started